MTN Group Limited. first-half profit increased and data revenue soared while Africa’s largest wireless operator said it’s in advanced talks to sell its tower business in Nigeria, Bloomberg reports.
Headline earnings per share, which exclude one-time items, rose nine per cent to 7.29 rand in the six months through June, the Johannesburg-based company said today in a statement. Sales grew 11 per cent to 72.8 billion rand ($6.8bn), with data revenue up 39 percent.
Data sales were boosted by an expanded third-generation network and an increase in smartphone use across the 22 countries in which it operates, Chief Executive Officer Sifiso Dabengwa said. Subscribers to MTN Mobile Money – used for payment in areas where banks are limited – grew by 24 percent to 18.4 million people. The shares gained 2.8 percent to 223.61 rand at the close in Johannesburg, the biggest advance in six months.
“Data penetration is still very low, Internet penetration is still very low,” Dabengwa told reporters. “We think that once we have data-enabled devices coming down below $30 to $20 levels we definitely will see a much greater uptake from data and Internet services.”
MTN plans to sell 8,640 existing Nigeria towers and 543 that are still being built to an entity that will be managed by a large mobile telecommunications infrastructure provider, the company said. The company intends to keep a non-controlling interest of 51 percent in the new entity and will enter into a lease agreement for the use of the tower infrastructure.
MTN is seeking transformational deals and has overhauled senior management in its fastest growing markets as it seeks to increase smartphone penetration and boost data revenue outside South Africa, where sales are under pressure from competitors cutting prices and regulators. [eap_ad_2] The company has partnered with Luxembourg-based Millicom International Cellular SA (MIC) and Rocket Internet AG to each own a third of African Internet Holdings, which has helped develop Nigerian online store Jumia.
“People seem to think the lower end of the market is not data intensive, but as the costs come down, we are seeing it is,” Bruce Main, a money-manager at Ivy Asset Management, said by phone. “So there is room for growth there. The company is also focusing on margin improvements and the CEO is aware of keeping costs down. That is encouraging.”
Total subscribers increased 3.5 percent to 215 million with 1.7 million net additions in Nigeria, its biggest market with 58.4 million customers. In South Africa, sales declined 7 percent to 19.2 billion rand. An interim dividend of 4.45 rand was declared, up 20 percent.
The company is working closely with relevant authorities in managing US and EU sanctions against Iran, Syria and Sudan, it said.[eap_ad_3]